BA quits talks on open skies

BRITISH AIRWAYS has pulled out of talks to form a joint venture with American Airlines, scuppering a Government plan to open up more routes to the US for domestic carriers.

BA pulled out of the talks in Washington today aimed at drawing up a bilateral air treaty amid concern about the stringent conditions set by America's competition registrar for approving their alliance with American Airlines.

BA said the terms set by the US Government effectively 'confiscated' BA assets without recompense. The US said BA and American had to surrender 224 take-off and landing slots at Heathrow before being allowed to link operations. The decision will be blow for the British Government's policy for liberalising air services with the US and opening American routes to more airlines.

The US government has been attempting to open up Heathrow for more American carriers. Currently only British Airways, Virgin Atlantic, American Airlines and United Airlines are allowed to fly direct from Britain to American gateway airports from Heathrow.

The British Government hoped the alliance between BA and American would allow more airlines to gain access to the previously closed US domestic market. They approved the alliance, at a regulatory price agreeable to the two airlines.

Britain appeared to be prepared to open up Heathrow to more US carriers if Washington granted anti-trust immunity to the BA and American alliance and a another alliance between bmi British Midland and United Airlines.

Britain said the decision by BA and American not to form an alliance had removed 'the immediate prospect of a large part of the UK's airlines industry gaining effective access to the US domestic market'. It will be a blow to bmi who hoped to operate services from London to the US.